Category: News This Week

Tax Hike to Boost Tobacco Revenue

Photo: sezerozger
The government of Pakistan will collect PKR200 billion ($698.5 million) in tobacco taxes this year, up from PKR148 in the previous fiscal year, reports Dawn, citing a study by The Capital Calling.
In February, the government significantly increased the federal excise duties. According to The Capital Calling study, the higher prices forced one in every 94 smokers in Pakistan to quit.
The tobacco industry says the higher taxes have prompted many smokers to buy their cigarettes on the black market. According to industry representatives, volumes of duty-not-paid cigarettes and smuggled cigarettes have shot up 32.5 percent and 67 percent, respectively, since January. This has bumped the illicit sector’s share to more than 42.5 percent of Pakistan’s total tobacco market.
Critics say the industry is exaggerating the problem, with some surveys estimating the share of illicit sales at only 18 percent of the tobacco market.
Pakistan Tobacco Co. has scaled back production in the wake of the tax hike, citing difficulties competing with the thriving illicit market. In a letter to the Federal Board of Revenue, the company stated its intention to reexport four cigarette making machines due to a decline in sales volume. The company has reportedly already shut down eight of 10 production lines at its Jhelum facility.
May 24, 2023
Misconceptions About E-cigs Persist: Study

Photo: pavelkant
About half of cigarette smokers and young adult nonsmokers think that nicotine-based electronic cigarettes have the same amount or even more harmful chemicals than regular tobacco-based cigarettes, according to a Rutgers study.
Published in Addiction, the study measured perceived levels of harmful chemicals in e-cigarettes compared with cigarettes using national samples of more than 1,000 adults ages 18 and older who smoke cigarettes and 1,000-plus adults ages 18 to 29 who are nonsmokers. The study also measured associations with e-cigarette/cigarette relative harm perceptions, e-cigarette use and interest. About 20 percent of all participants believed e-cigarettes contain fewer harmful chemicals than cigarettes while about 30 percent responded that they did not know how the levels compared.
“Our results were interesting to see given that previous review reports suggest e-cigarettes expose users to fewer types and lower levels of harmful and potentially harmful chemicals than cigarettes,” said Olivia Wackowski of Rutgers Center for Tobacco Studies, an associate professor at the Rutgers School of Public Health and lead researcher of the study, in a statement. “It was also interesting to find that only about half of adult smokers who thought e-cigarettes have fewer harmful chemicals also thought e-cigarettes are less harmful to health.”
E-cigarette harm perception relative to typical cigarettes is a common question included on major national health and tobacco surveys in the United States. However, surveys of e-cigarettes typically haven’t included a question about the perceived exposure to or level of harmful chemicals in e-cigarettes relative to cigarettes.
According to the study researchers, measuring perceptions of e-cigarette and cigarette chemical exposure is important because e-cigarette communications often directly refer to chemicals in some way, which may impact perceptions about chemicals and harms from using e-cigarettes compared to cigarettes.
May 24, 2023
Governments Urged to Hasten End of Smoking

Jacek Olczak | Photo: PMI
Current tobacco control policies are not working fast enough to reduce the prevalence of smoking and may be prolonging cigarette use, according to Philip Morris International CEO Jacek Olczak.
Speaking on May 23 at the UnHerd Club in London, Olczak said that cigarettes belong in museums and called on governments globally to accelerate the end of cigarettes, according to a company press release.
Drawing upon a new hypothetical model based on data from the World Health Organization and other parties, Olczak explained that even if smoke-free products were assumed to be only 80 percent less risky than cigarettes, if people who currently smoke were to switch to them completely, then over their lifetime there’s a potential for a 10-fold reduction in smoking-attributable deaths compared with historical tobacco control measures alone.
He highlighted the paradox that smoke-free products are banned in some countries while cigarettes—despite their far greater risk of harm—can still be sold. While acknowledging that the model he used has limitations and is built on assumptions, Olczak noted that the public health cost of ignoring the potential of smoke-free products could be immense.
In 2016, PMI committed to moving away from cigarettes. As of March 31, 2023, the company had invested more than $10.5 billion since 2008 in developing and commercializing smoke-free products, which today account for nearly 35 percent of the company’s total net revenues. The mission, Olczak explained, is to reduce smoking by replacing cigarettes with less harmful alternatives and ultimately to make cigarettes obsolete.
However, he noted, PMI’s ability to progress on this mission is being frustrated by a combination of blind opposition from anti-tobacco organizations and governments’ overreliance on the so-called precautionary principle, which some interpret as “better not to do anything until we know everything.”
Olczak called on governments worldwide to follow the examples of countries like Sweden, Japan and the U.K., and adopt policies that give adult smokers who don’t quit a wide choice of alternatives to continuing smoking so they can make better choices and cigarettes can become a historical artifact. He also challenged anti-tobacco organizations to update their thinking, stop blocking innovation, and work toward a common goal to achieve a smoke-free future, faster.
May 23, 2023
Malaysia Ready to Table Endgame Bill

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Malaysia’s Ministry of Health is ready to table the Control of Smoking Product for Public Health Bill, which includes the Generational Endgame (GEG) policy, reports the New Straits Times.
If enacted, the legislation would prohibit anyone born in 2007 or later from buying and using cigarettes or vaping products in Malaysia. A provision to ban possession of those products has been dropped from the bill on the recommendation of the Parliamentary Special Select Committee.
The bill also governs registration, advertising, promotion and sponsorship, packaging and sales of smoking products.
“Any violation, including selling of cigarettes to children in the GEG group will be an offence when the bill is passed,” said the health minister’s special adviser, Helmy Haja Mydin.
People in the targeted age group caught buying or using tobacco or vaper product risk fines of MYR500 and community service. The fines had been reduced from a previous proposal to avoid unduly burdening the GEG group.
According to Mydin, the order is meant to educate and show that the policy is not purely punitive.
After its enactment, the bill requires periodic reports to measure the legislation’s effectiveness in combating underage smoking.
May 23, 2023
France Bans Smoking in Forests

Photo: Thicha
French lawmakers have voted to ban smoking in forests during the fire season, reports AP.
The National Assembly voted 197-0 in a first reading on May 17 of a proposed law to better prevent and tackle forest fires. The draft has already passed through the Senate.
The smoking ban builds on an existing forest law that already bans the lighting of fires within 200 meters of wooded areas. It aims to reduce the risk of fires started by discarded cigarettes—a frequent cause of blazes, especially when woodlands are tinder-dry.
Forest fires have long regularly afflicted France, one of the most wooded countries in Europe. But they generally used to start later in the year. Major wildfires in Europe are now starting earlier, becoming more frequent and harder to stop, and doing more damage. Scientists say they’ll likely get worse as climate change intensifies. The Mediterranean region is warming faster than the global average.
The government says human activity is by far the most frequent trigger of forest fires in France, responsible for 90 percent of blazes.
May 23, 2023
Illicit Tobacco Trade Up in Ireland

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The illegal cigarette trade cost the Irish government approximately €384 million ($415.25 million) in lost excise duty and value-added tax during 2022, reports the Irish Examiner, citing estimates by the Revenue Commissioners.
A survey carried out by Ipsos MRBI on behalf of the Revenue Commissioners, shows that 17 percent of all cigarette packs held by smokers in 2022 were illegal. This is up from 13 percent in 2021.
An illicit rate of 17 percent equates to approximately 31.7 million illegal packs. Nearly nine in 10 of those illegal packs were classified as contraband—that is, normal commercial brands that were purchased abroad and brought into the country. A further 13 percent of cigarette packs were found to be legal but with no Irish duty paid—up 8 percent from 2021.
The survey also found 17 percent of pouches of roll-your-own tobacco held by smokers surveyed were illegal and 10 percent were legal but with no Irish duty paid.
In 2022, the Revenue Commissioners seized 51.6 million cigarettes valued at €39.5 million, and 11,803 kg of tobacco with an estimated value of €8.5 million.
The agency obtained 41 summary convictions relating to the sale of illicit tobacco, four of which were on indictment with fines of €76,250 imposed.
There were 24 convictions relating to tobacco smuggling in 2022, four of which were on indictment, with fines of €35,100 imposed.
May 22, 2023
Pakistan Tobacco Trims Output as Illicit Trade Booms After Tax Hike

Photo: Taco Tuinstra
Pakistan Tobacco Co. (PTC) is scaling back production as it struggles to compete with illicit tobacco sales, report Pakistan Today and The Express Tribune.
In a letter to the Federal Board of Revenue, the company stated its intention to re-export four cigarette making machines due to a decline in sales volume. The company has reportedly already shut down eight of 10 production lines at its Jhelum facility.
The move comes in the wake of a steep tobacco tax hike. In February, Pakistan increased the federal excise duty by more than 200 percent, driving smokers to cheaper untaxed locally manufactured tobacco products and smuggled cigarettes. In March, production of duty-paid tobacco products plunged 50 percent, according to the Pakistan Bureau of Statistics. The overall large-scale industry, by contrast, suffered only a decline of 25 percent in the production of duty-paid products.
According to PTC representatives, volumes of duty-not-paid cigarettes and smuggled cigarettes have shot up 32.5 percent and 67 percent, respectively since January. This has bumped the illicit sector’s share to more than 42.5 percent of Pakistan’s total tobacco market.
In 2022-2023, the share of legitimate tobacco sector was 41.4 billion sticks while the illicit sector sold 41.6 billion sticks. Observers expect the February tax hike to hand an additional 11.8 billion sticks to the black market in 2023-2024.
PTC Senior Business Development Manager Qasim Tariq said that, as a result of the tax hike, the government would for the first time in Pakistan’s history lose more tax income to the illicit sector than it earned in revenue from legitimate companies.
“If the current fiscal regime prevails, damage to the national exchequer as well as the legitimate industry will be immense and tough decisions will have to be taken,” he cautioned.
A track-and-trace system to help combat illegal tobacco sales has been delayed by legal challenges and other setbacks.
May 22, 2023
CTP Hires Health Equity Advisor
The U.S. Food and Drug Administration Center for Tobacco Products (CTP) has hired Charlene Le Fauve as its first senior advisor for health equity.
“Dr. Le Fauve is a behavioral scientist and addiction researcher with 25 years of federal work experience related to health equity and health disparities research,” the CTP wrote on its website. “She has dedicated her career to advancing health equity and the health of underserved and underrepresented populations through research and research workforce development.”
Most recently, Le Fauve served as the senior advisor to the chief officer for scientific workforce diversity at the National Institutes of Health (NIH). In this role, she educated national audiences about NIH’s role in scientific workforce diversity and health equity research.
Prior to her NIH role, Le Fauve held various leadership roles, such as the deputy director of disparities research and global mental health at the National Institutes of Mental Health and the senior policy coordinator and lead for the Center for Medicare and Medicaid Services Team at the Department of Health and Human Services.
“Diversity, Equity, Inclusion, and Accessibility are core values of CTP, and efforts are underway to ensure that the full scope of the Center’s work is reflective of these principles. In this new position, which is the first of its kind for any Center at FDA, Dr. Le Fauve will work with all of CTP’s Offices to ensure health equity is integrated into the Center’s programmatic plans and priorities,” the CTP said.
“She also will serve as CTP’s primary representative in a variety of activities that promote and facilitate the reduction of tobacco-related health disparities, including during external meetings, conferences, and presentations.”
May 22, 2023
PMI Mulls Reboot of Production in Ukraine
Massimo Andolina | Photo: PMI
Philip Morris International is exploring options to resume production in Ukraine. In an interview with Interfax Ukraine, PMI’s Europe Region President Massimo Andolina discussed the multinational’s operations in the country in the wake of Russia’s invasion of Ukraine.
Due to safety concerns caused by the ongoing war, PMI has halted production at its Kharkiv factory. Some of its brands in Ukraine are currently produced by Imperial Brands under a temporary arrangement.
However, PMI is committed to launching its own alternative production facility in Ukraine. Andolina highlighted two reasons for this: the desire to produce PMI’s own products within the country and to signal the company’s commitment to investing in Ukraine, even during the war. PMI, he said, is actively exploring various alternatives for establishing a new production facility and hopes to make an announcement in the near future.
The interview also addressed the decline of PMI sales in Ukraine. Andolina cited two factors: the loss of consumers as some left the country or were in occupied territories, and competition from illicit products.
PMI, he said, has engaged in discussions with the government to address this problem, acknowledging that resolving the issue will take time but expressing confidence in the government’s commitment to combat corruption and criminal activities. The company anticipates significant improvements in tackling illicit trade in the coming years.
Andolina commented also on the government’s decision to equalize taxes on cigarettes and heat-not-burn products. PMI, he said, believes that these products should be recognized as different and taxed accordingly. They noted the success of heated tobacco products in Ukraine and highlighted the need for differentiated tax treatment.
The interview also touched upon PMI’s position in Russia. Andolina emphasized that during the war, the company’s primary concern has been protecting the lives of its employees in Ukraine. As a result, it suspended investments and scaled down operations in Russia. While PMI had previously announced its intention to exit the Russian market, changes in the regulatory environment have made it difficult for companies with substantial presence and assets to leave.

May 20, 2023
KT&G Authorized as “Economic Operator”

Kim Yong Beom, head of the KT&G Finance Office (left), and Jeong Seung Hwan, head of the Seoul headquarters of the Korea Customs Service, during the certification ceremony at the Customs’ service Seoul headquarters in Gangnam-gu on May 17. | Photo: KT&G
The Korea Customs Service has certified KT&G as an “Authorized Economic Operator” (AEO).
AEO is an international standard certification system in which the Korea Customs Service recognizes companies based on their performance in terms of export and import safety management, legal, internal control systems, financial soundness and safety management.
The AEO certification provides KT&G with benefits, such as speedy customs clearance and reduced inspections of imported and exported goods.
The certification will help the company accelerate its global expansion program as major export destinations such as the United Arab Emirates, Indonesia and Tunisia will receive similar customs clearance benefits under a mutual recognition arrangement between those countries and Korea.
“We expect to be able to deliver products to our domestic and foreign customers more quickly under challenging trade conditions, such as rising protectionism and non-tariff barriers,” KT&G said in a statement. “In the future, we will acquire additional local AEO certifications for our foreign subsidiaries to strengthen our import and export competitiveness and accelerate our leap to becoming a global top-tier company.”
May 20, 2023